BBC's Digital Media Initiative In Focus

The BBC Trust has just published an independent report commissioned from the National Audit Office on the BBC's management of its Digital Media Initiative (DMI).
The DMI is a technology transformation project designed to allow BBC staff to develop, create, share and manage video and audio content and programming on their desktop, and intended to improve production efficiency across the BBC.
The estimated gross cost of delivery and implementation to the end of March 2017 is £133.6 million.
The NAO has concluded that the early stages of the Programme were not value for money, mainly as a result of a 21 month delay leading to £26 million of benefits not being achieved in the period 2009-10 to 2010-11.
The BBC appointed its existing IT contractor (Siemens) to develop the Programme. The contract with Siemens was terminated by mutual agreement in July 2009.
The BBC then took responsibility for delivery of the project in-house and was able to offset its increased costs by a £27.5 million financial arrangement agreed with Siemens.
In-house delivery of the system has started well, and, while there is a considerable way to go before the Programme is complete, users have been positive about the elements delivered thus far.
Key points from the report and the Trust's response to them included the way in which the BBC appointed the contractor without a new competition and that the BBC awarded the DMI contract to Siemens under a technology framework agreement intended to provide efficiencies, in part by reducing procurement costs.
The Trust also noted that the financial benefits of the Programme were initially overstated.
The original cost-benefit estimate in January 2008 was a projected net benefit of £17.9 million. The latest forecast is of a net cost to the BBC of £38.2 million by March 2017, partly offset by a £27.5 million financial package agreed with Siemens, leading to a final net cost of £10.7 million.
It noted that the financial benefits case was revised in the 2010 case, and fully agrees with the NAO's recommendation that greater rigour should be applied than was evident in the 2008 business case.
Anthony Fry, BBC Trustee with lead responsibility for value for money, said: "The DMI is a cutting edge project that will improve the way the BBC operates and transform the way it makes programmes and content.
"The Trust agrees with the NAO that the early phase of the project ran into significant difficulties, but the BBC reacted with speed and efficiency, and since bringing it in-house delivery is progressing as planned.
"Clearly there are lessons to be learnt and the Trust will continue to monitor progress against the action plan we've asked the BBC Executive to produce," he said.
Amyas Morse, Head of the National Audit Office, said: "The BBC's approach to the early stages of this Programme was disappointing and did not achieve value for money.
"However, since taking the Programme back in house, delivery of the system has progressed well, and users have responded positively.
"The real test of value for money of the Programme as a whole will be the take up by users across the BBC and elsewhere, and on this it is too early to conclude."
(BMcC/GK)